Feb 11 (Reuters) - Marketing platform AppLovin missed market estimates for fourth-quarter sales on Wednesday, indicating tepid demand for its advertising services amid increasing competition and an uncertain macroeconomic environment.
Companies ranging from Big Tech to up-and-coming advertising platforms have been fighting each other for prized ad dollars, creating an increasingly competitive landscape, challenging providers such as AppLovin.
Shares of the company fell nearly 6% in premarket trading, after the company reported December quarter sales of $1.66 billion, missing analysts' average estimate of $1.70 billion according to data compiled by LSEG.
Social media giant Meta Platforms bidding heavily into Apple's iOS traffic would be a genuine challenge as increased density in ad auctions could increase ad pricing and compress net margins, analysts at Jefferies said in a note ahead of earnings.
A cautious spending environment has also emerged from uncertain macroeconomic conditions, with enterprises across industries holding back on big expenses as they prioritize spending on artificial intelligence integration and mission-critical applications.
AppLovin's fourth-quarter net income grew 84% to $1.10 billion.
Still, the company forecast first-quarter sales between $1.75 billion and $1.78 billion, above estimates of $1.67 billion.